The Companies Act 2016 (hereinafter referred to as “CA2016”) has been implemented on the 31st January 2017. CA2016 has replaced the previous Companies Act 1965 and the changes were significant.
We would like to highlight the following significant changes :
(1) The procedures for incorporation have been simplified.
(2) Single resident director and single shareholder for Sdn. Bhd., public company must have at least two resident directors.
(3) Shares “No Par Value” Regime, the concept of “Authorised share capital” and “par value” have been abolished.
(4) After the Company is incorporated, Company secretary should be appointed within 30 days of incorporation.
(5) For companies which incorporated after 31st January 2017, the company may or may not adopt constitution after incorporation. However, Constitution is mandatory for Company Limited By Guarantee.
(6) Nevertheless, for companies incorporated before 31st January 2017, Memorandum of Association and Articles of Association (“M&A”) is deemed to be the Constitution of the company. The Company can have the options of (i) To abolish its existing M&A, (ii) Amend certain clauses in the existing M&A, or (iii) Alteration of the whole of M&A / Constitution by replacing with a new Constitution.
(7) Sdn. Bhd. no longer required to hold Annual General Meeting (“AGM”).
(8) Decoupling of Financial Statement and Annual Return submission, i.e. circulation of audited financial statements to the Members of the Company within 6 months from the financial year end; Annual return to be lodged within 30 days from the date of anniversary of the incorporation of the company.
(9) Dividends can only be distributed out of profits after the solvency test is performed / fulfilled as determined by the Board of Directors.
(10) Share certificate is optional and no longer be evidence of title.
(11) It is optional for a company to adopt Common seal.
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